How meanness and zigzaggery jeopardize your lifestyle Thursday, Jun 15 2017 

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

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It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders..
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Here is how the meanness and zigzaggery of leadership jeopardizes your health, your income, and your lifestyle.

Introduction:

The U.S. federal government is different from state and local governments. It is different from businesses. It is different from you and me.

The federal government uniquely is Monetarily Sovereign.  It is sovereign over the U.S. dollar.

The federal government, 240 years ago, created from thin air, the laws that created the dollar from thin air. The government created as many dollars as it wished, and gave those dollars the value it wished — an arbitrary number of grams of silver.

Image result for press computer key to create money

Yes, it really is this simple for the federal government.

 

Today, the government still creates dollars, now at the press of a computer key, and still controls the value of the dollar (i.e. inflation), now by changing interest rates.

Being the absolute sovereign over the dollar, the federal government never can run short of dollars. It has no need to collect taxes. Even if all federal tax collections were $0, the federal government could continue creating and spending dollars, forever.

It also has no need for borrowing and indeed does not borrow. The so-called “debt” is not the result of borrowing, but rather the acceptance of deposits in Treasury security accounts at the Federal Reserve Bank — similar to your deposits in your bank savings account.

The federal government easily could provide comprehensive, no-deductible, health care insurance coverage for you and for every other man, woman, and child in America (Medicare for All), and do it while eliminating FICA and controlling inflation.

That is how much power the federal government has over its sovereign currency, the dollar.

Why then must you see articles like this:

Medicaid cuts could be catastrophic for Idaho schools
By Julie Wootton, Times-News | Posted Jun 14th, 2017 @ 1:40pm

Beyond the typical classroom setting, some of the teenagers also receive services at school such as speech, physical or occupational therapy.

School districts pay for that mostly by using reimbursements from Medicaid, a federal program that provides health coverage to low-income Americans and people who have disabilities.

But the new federal American Health Care Act aims to cut Medicaid over 10 years by $880 billion — a total reduction of 25 percent.

Cutting Medicaid funding would place more financial responsibility on local school districts, said Sherry Bingham, special services director for the Minidoka County School District.

Cuts by the federal government in reducing the amount of Medicaid monies to already underfunded special education programs would be disastrous.

Spending by local school districts is paid for by local taxpayers. By contrast, federal spending does not cost taxpayers one cent. So, why would the politicians want to replace federal spending with local spending?

GOP Medicaid cuts to hit rural America hardest, report finds
by Phil Galewitz, Kaiser Health News @CNNMoney June 7, 2017: 3:52 PM ET

Trump Country it may be, but rural counties and small towns also make up Medicaid Country — those parts of the nation whose low-income children and families are most dependent on the federal-state health insurance program, according to a Georgetown University report released Wednesday.

Medicaid’s enrollment has swollen to more than 72 million in recent years, and the ranks of uninsured Americans has fallen to 9% in 2015 from 13% in 2013. That’s largely due to the Affordable Care Act, which allowed states to expand Medicaid eligibility with federal funds. Thirty-one states, plus the District of Columbia did so.

Those gains may be in jeopardy under the House GOP health care bill that would replace major parts of the ACA — known as Obamacare — and dramatically cut federal funding for Medicaid.

Why do the politicians, who were elected by the lower-income, rural families, now put forth plans to hurt the people who elected them?

CNNMoney Reports
Medicaid cut could put jobs in Kentucky at risk

Cuts to Medicaid have far-reaching effects, not only on your health but on your income. Medicaid payments support hundreds of thousands of healthcare-related jobs in such disparate industries as manufacturers of hospital supplies and equipment to ambulance builders to drug stores and pharmaceuticals.  And let’s not forget all the medical personnel that are paid, in part, by Medicare.

Every dollar the federal government pumps into Medicaid circulates into the economy as a job-creating stimulus dollar.

Your Money, Your America
In Texas, people with erratic incomes risk being cut off from Medicaid
by Shefali Luthra, Kaiser Health News @CNNMoney, June 15, 2017: 6:08 AM ET

To qualify for Medicaid in her home state of Texas, most children must come from families with incomes at or below 138% of the federal poverty level. In 2017, that’s $33,948 for a family of four.

Texas also has one of the country’s strictest Medicaid verification systems: It runs regular checks on family finances after children are enrolled to make sure they continue to qualify.

Poole and her husband work in seasonal industries. She’s an hourly employee in agriculture and he’s in oil. Their hours and incomes have changed on a monthly, even weekly basis. That means their nine children, five of whom were adopted, and all of whom have complex health conditions, could lose health insurance one month but then qualify the next, even though the family’s total income for the year does not exceed the eligibility threshold.

States, being monetarily NON-sovereign,  and limited in their spending ability, look for ways to cut benefits.  The federal government has no such need.

Medicaid Cuts In Wisconsin Would Undermine Training For Adults With Disabilities
June 14, 20172:32 PM ET

And, it’s not just the cut themselves that are destroying Medicaid and the Affordable Care Act (ACA) program; it’s the uncertainty.

Blue Cross and Blue Shield of NC spells out how much Trump-fueled uncertainty hikes premiums
POSTED 12:31 PM, MAY 27, 2017, BY CNN WIRE

Many insurers say that the uncertainty emanating from Washington D.C. is prompting them to request even steeper hikes in premiums for 2018.

Blue Cross and Blue Shield of North Carolina is spelling out just how much it could cost consumers.

The insurer is requesting a rate hike of nearly 23% for next year. But it said it would have only asked for an 8.8% bump if President Trump and House Republicans agreed to fund the Obamacare cost-sharing subsidies through 2018.

The mere fact that the GOP wants and threatens to cut federal Medicaid payments is sufficient to sabotage ACA. As the Trump administration warns about cuts, these threats alone weaken the program, which the politicians then use as further “proof” the program should be cut.

It is a self-fulfilling, repeating act: Threaten, weaken, cut; threaten, weaken, cut.

And then, to add to the uncertainty, we have the zigzaggery of a confused administration:

Trump, in Zigzag, Calls House Republicans’ Health Bill ‘Mean’
By THOMAS KAPLAN, JENNIFER STEINHAUER and ROBERT PEARJUNE 13, 2017

President Trump bluntly derided a House attempt to repeal the Affordable Care Act as “mean.” and in doing so, injected himself in a brewing Senate battle that his fellow Republicans had prayed he would avoid.

At a White House lunch, Mr. Trump alerted his guests that a bill passed by the House this spring — one he lauded last month as a “great plan” that was “very, very incredibly well-crafted” — was now “mean.”

“I really appreciate what you’re doing to come out with a bill that’s going to be a phenomenal bill for the people of our country: generous, kind, with heart. That’s what I’m saying. And that may be adding additional money into it.

We have written about meanness, before: The Meaning of America — now worse.

Now suddenly, the entire thrust of the GOP — to cut benefits for the poor and to save taxes for the rich — a thrust that has caused insurance companies to raise rates or to leave the plan altogether — now the “Party of the Rich” has become the “Party of the Zigzaggery” with no real direction other than to destroy everything, Obama and to widen the Gap between the rich and the rest.

Of course, both parties can share the blame for spreading “the Big Lie” — the lie that federal “debt” (deposits) must be reduced, and federal deficits cut (when exactly the opposite is true).

So you, the public, will suffer from their lies and zigzaggery, if you accept without question, their dishonesty and their incompetence.

The solution is simple and straightforward: FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (Step #2 of the Ten Steps to Prosperity.)

Anything else is “mean.”

Rodger Malcolm Mitchell
Monetary Sovereignty

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The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Economic Bonus)) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONE Five reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE FEDERAL TAXES ON BUSINESS
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and business taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.

MONETARY SOVEREIGNTY

–The cost of ignorance goes up, again: Social Security version Thursday, Jul 23 2015 

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

Mitchell’s laws:
•Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
•Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money.
•The more federal budgets are cut and taxes increased, the weaker an economy becomes. .
Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
•The single most important problem in economics is
the gap between rich and poor.
•Austerity is the government’s method for widening
the gap between rich and poor.
•Until the 99% understand the need for federal deficits, the upper 1% will rule.
•Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..

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You regular readers of this blog know that ignorance of economics created the disaster now known as the euro. You know the euro nations voluntarily surrendered the single most valuable asset any nation can have: Its Monetary Sovereignty.

Because of their economics ignorance, the whole of the eurozone either is, or soon will be, suffering from austerity, i.e the loss of income, jobs, health care, education, housing — in short, the loss of a decent lifestyle that government is supposed to help provide.

Greece may be the most extreme example currently, but not the only and not the last.

We may shake our heads at the ignorance of people who would allow their government to surrender its most valuable asset, but we needn’t feel too superior. Despite the fact that the U.S. federal government retains its Monetary Sovereignty, and therefore cannot run short of dollars, we allow it to act as though it were monetarily NON-sovereig

We allow the government to husband its dollars like some penurious miser, straight out of Dickens.

Social Security disability fund to run dry next year.

The 11 million Americans who receive Social Security disability face steep benefit cuts next year, the government said Wednesday, handing lawmakers a fiscal and political crisis in the middle of a presidential campaign.

The trustees who oversee Social Security and Medicare said the disability trust fund will run out of money in late 2016. That would trigger an automatic 19 percent cut in benefits, unless Congress acts.

The average monthly benefit for disabled workers and their families is $1,017.

Think of it. A disabled person, too ill to work, receives a pittance: $1,017, to support his/her family. But that is too much for the politicians.

The typical beneficiary would see a reduction of $193 a month.

“Today’s report shows that we must seek meaningful, in some instances even urgent, changes to ensure the program is on stable ground for future generations,” said Jo Ann Jenkins, chief executive officer of AARP.

AARP, which supposedly helps seniors and other Social Security beneficiaries, spreads the Big Lie, that taxes fund federal spending.

It’s a lie, because even were FICA to be eliminated, the federal government could continue funding Social Security benefits, forever.

Just as the U.S. federal government never can run short of its own sovereign currency, the dollar, agencies of the federal government never can run short of dollars, unless Congress wills it.

In more bad news for beneficiaries, the trustees project there will be no cost-of-living increase in benefits at the end of the year. It would mark only the third year without an increase since automatic adjustments were adopted in 1975.

Separately, about 7 million Medicare beneficiaries could face a monthly premium increase of at least $54 for outpatient coverage. That works out to an increase of more than 50 percent — for outpatient coverege.

Day by day, month by month, the middle- and lower-income groups are squeezed, just as in Greece, and for no good reason.

The annual report card on the financial health of Social Security and Medicare shows that the federal government’s largest benefit programs are feeling the strain of aging baby boomers as they both approach milestone anniversaries.

“The strain” is another way of saying that more people are growing older, and they need the kind of help a 1st rate government is supposed to provide. Why else would we have a government?

There was some good news in the report: The trustees said Social Security’s retirement fund has enough money to pay full benefits until 2035, a year later than they predicted last year. At that point, Social Security will collect enough in payroll taxes to pay about 75 percent of benefits.

Medicare’s giant hospital trust fund is projected to be exhausted in 2030, the same date as last year’s report. At that point, Medicare taxes would be enough to pay 86 percent of benefits.

The Big Lie continues — the pretense that like you and me (who are not Monetarily Sovereign), the government can run short of dollars to pay its bills. It cannot.

Advocates for seniors say that gives policymakers plenty of time to address both programs without cutting benefits. But some in Congress note that the longer lawmakers wait, the harder it gets to address the shortfall without making significant changes.

Nonsense. It’s not hard at all. Simply acknowledge the federal government’s ability to support Social Security at any desired level, and while making that admission, get rid of the worst tax in U.S. history: FICA.

There is an easy fix available for the disability program: Congress could shift tax revenue from Social Security’s much larger retirement fund, as it has done in the past.

President Barack Obama supports the move. And acting Social Security Commissioner Carolyn Colvin said shifting the tax revenue “would have no adverse effect on the solvency of the overall Social Security program.”

There would be no adverse effect, simply because the U.S. government has the unlimited ability to support Social Security.

But why will Congress not admit this simple truth? Here’s the clue:

Republicans say they want changes in the disability program to reduce fraud and to encourage disabled workers to re-enter the workforce.

In January, Sen. Rand Paul, R-Ky., suggested that a lot of slackers are on disability. Paul, who is running for president, joked that half the people getting benefits are either anxious or their back hurts.

And there you have it. The Republican party of the rich, spreads the cruel lie that disabled people are fraudulent fakers and slackers, who need to be “encouraged” to re-enter the workforce.

Note the simpering laughter of Republican Rand Paul, slandering those unfortunate, disabled people. As if life weren’t difficult enought for them, a liar like Paul has to heep on the scorn. This is the kind of cruelty to the afflicted one has come to expect from Republicans. 

Here is Doctor Rand Paul, who grew up in luxury. He received his medical degree from the renowned Duke University School of Medicine. His father also was a doctor, a U.S. Congressman, who ran for President three times. This is the privileged Rand Paul who sneers at the poor, the aged and the disabled, from his lofty perch on high.

If the retirement and disability funds were combined, they would have enough money to pay full benefits until 2034, the trustees said.

Or, the federal government simply could pay the benefits.

The Medicare premium increases would affect Part B, which provides coverage for outpatient services.

For about 70 percent of beneficiaries, premium increases cannot exceed the dollar amount of their Social Security cost-of-living adjustment, or COLA. Because no COLA is currently expected for next year, increased costs of outpatient coverage would have to be spread among the remaining 30 percent.

Translation: The Monetarily Sovereign federal government is running out of money, but the disabled and the poor have plenty of money. So cut federal spending while forcing the people who can afford it least, to pay more.

Why does the government get away with it? Because the electorate is ignorant of economics reality. The people have been brainwashed into believing the federal government can run short of dollars, and/or that any increases in federal spending will cause a Zimbabwe-esque hyperinflation (another part of the Big Lie.)

Just as the Greek people suffer for their economics ignorance, so to do we Americans suffer for ours.
Rodger Malcolm Mitchell
Monetary Sovereignty

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Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)

10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
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10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
1. A growing economy requires a growing supply of dollars (GDP=Federal Spending + Non-federal Spending + Net Exports)
2. All deficit spending grows the supply of dollars
3. The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
4. The limit to non-federal deficit spending is the ability to borrow.

THE RECESSION CLOCK
Monetary Sovereignty

Monetary Sovereignty

Vertical gray bars mark recessions.

As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.

#MONETARYSOVEREIGNTY

–The debt snakes slither in again. Don’t listen. Tuesday, Jul 21 2015 

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

Mitchell’s laws:
•Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
•Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money.
•The more federal budgets are cut and taxes increased, the weaker an economy becomes. .
Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
•The single most important problem in economics is
the gap between rich and poor.
•Austerity is the government’s method for widening
the gap between rich and poor.
•Until the 99% understand the need for federal deficits, the upper 1% will rule.
•Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..

===================================================================================================================================================================================================================================================================================

Adam and Eve learned that snakes are sneaky liars. They not only lie outright, but they twist the truth into lies. And so it is with the debt snakes, as during election time, they once again try to deceive the populace.

Way, way back in 2009, we published, “Federal Debt: A ‘ticking time bomb’.” Here is how the article began:

Popular faith holds that the federal debt is a ticking “time bomb,” ready to explode into inflation and high interest rates, and destroy our economy.

Here are a few references, beginning 70 years ago.

Even with the end of the gold standard in 1971, arguably the most significant economic event since the Great Depression, the language never changes — as though 1971 were a non-event.

Sept 26, 1940, New York Times: “. . . unless an end is put to deficit financing, to profligate spending and to indifference as to the nature and extent of governmental borrowing, the nation will surely take the road to dictatorship, Robert M. Hanes, president of the American Bankers Association asserted today. He said, “insolvency is the time-bomb which can eventually destroy the American system . . . the Federal debt . . . threatens the solvency of the entire economy.”

The post goes on to quote articles from 1960, 1983, 1984, 1985, 1987, 1989, 1992, 1985, 2003, 2004, 2005, 2006 and 2007 (subsequently added, articles dated 2010 and 2011), all referring to the federal debt as a “time bomb.”

Just last year, Forbes ran an article titled:

“Defusing Washington’s Debt Bomb” written by Sen. Rob Portman.

Under the Constitution, only Congress can authorize the United States to borrow money to pay its bills. And since World War I, Congress, recognizing the danger of runaway borrowing, has placed a ceiling on the amount of debt Washington can accumulate.

Going over the debt limit is not the right solution. But neither is simply raising the debt limit without doing anything to address the underlying problem, especially at a time of record debt.

The American people understand this. Think about it as parents: when one of our kids goes over the limit on the credit card, we don’t just pay the bill and ask the bank to raise the limit. We take steps to address the overspending problem and make sure it doesn’t happen again.

And the beat goes on. In May, 2015,The National interest published:

Why America’s Debt Bomb Won’t Explode… Yet

Here we are, 75 (!) years after that 1940 article, still frightened, waiting for that ticking time bomb to explode.

Never mind that the U.S. federal government, being Monetarily Sovereign, never can run short of dollars to pay its bills.

Never mind that even if all federal tax collections fell to $0, the U.S. federal government could continue spending forever.

Never mind, that being Monetarily Sovereign, the federal government creates dollars ad hoc, by paying bills and does not need to borrow — ever.

And never mind that despite massive federal spending, inflation actually is below the federal goal of 2.5%, and easily is controlled by the Fed via interest rates.

monetary sovereignty

Never mind that federal deficits are surpluses for the economy and necessary for economic growth, and that federal surpluses lead to recessions and depressions:

1817-1821: U. S. Federal Debt reduced 29%. Depression began 1819.
1823-1836: U. S. Federal Debt reduced 99%. Depression began 1837.
1852-1857: U. S. Federal Debt reduced 59%. Depression began 1857.
1867-1873: U. S. Federal Debt reduced 27%. Depression began 1873.
1880-1893: U. S. Federal Debt reduced 57%. Depression began 1893.
1920-1930: U. S. Federal Debt reduced 36%. Depression began 1929.

NEVER MIND THAT THERE IS NO “DEBT BOMB.” It’s a myth.

Never mind all these facts, because the debt snakes pay no attention to facts.

And here comes another one:

Kasich to push balanced budget amendment in 6-state tour
By JAMES NORD – Associated Press – Wednesday, January 21, 2015

Ohio Gov. John Kasich has kicked off a six-state tour pushing a balanced budget amendment to the U.S. Constitution with a meeting in South Dakota in which he called on state lawmakers to get behind the proposal.

“Who the heck thinks we should keep spending without any regard to the consequences?” Kasich, a Republican, asked the South Dakota gathering. “I don’t care … if you’re a Republican, a Democrat or a Martian. This is not what we should be doing as a nation. It’s irresponsible.”

Exactly why is it “irresponsible,” Governor Kasich? Will the federal government be like Greece and the other euro nations, unable to pay their debts?

No, Greece and the other euro nations are monetarily NON-sovereign. They have no sovereign currency.

Like our cities, counties, states, businesses and people, all of whom also are monetarily NON-sovereign, Greece can run short of the currency it uses.

The U.S. federal government, being Monetarily Sovereign, has the unlimited ability to create its sovereign currency, to pay its bills.

Well Governor Kasich, is it “irresponsible” (and a “ticking time bomb”) because our children will have to pay the federal debt?

No, federal taxes do not pay for federal spending. The federal government creates dollars every time it pays a bill. The federal debt has no effect on the federal taxes our children will pay.

Or is the debt “irresponsible” and a “ticking time bomb” because it will cause inflation?

No, inflation is caused by a multitude of factors, primarily oil prices and low interest rates.

Here is what Kasich’s nonprofit advocacy group, Balanced Budget Forever says:

In just over a year, five states have passed resolutions in support of a convention to set a balanced budget process in motion. Today, there are now 27 states committed to a convention.

Just 7 more states are needed to trigger change.

While a member of Congress, Kasich supported a federal balanced budget amendment and, as chair of the House Budget Committee, successfully led efforts to balance the federal budget in fiscal years 1998, 1999, 2000 and 2001, the first balanced budgets since 1969.

Yes, and those balanced budgets (actually surpluses) led directly to the recession of 2000. (Almost every recession in recent history has been introduced with reductions in federal deficit growth.)

monetary sovereignty

And we’re coming closer and closer to passing a disastrous “balanced budget” amendment, that will push America into the same horrifying austerity problem Greece suffers from.

Knowing that federal deficit spending adds dollars to the economy, and so is stimulative, and the lack of deficit spending leads to recessions and depressions, why do Kasich and his group insist that the U.S. commit financial suicide by eliminating deficit spending?

I believe there are two reasons:

1. He wishes to become President, and in the crowded Republican field, “balanced budget” gives him a talking point. He relies on the public not understanding the difference between the Monetarily Sovereign government vs. you and me (and states, counties and cities) which are monetarily NON-sovereign.

To the economically ignorant populace, debt is bad and surpluses are good. The people don’t realize that federal debt is the economy’s surplus. So Kasich can position himself as a prudent politician, when in fact, his balanced budget would lead to a recession far worse than what we had in 2008 (a severe recession cured by federal deficit spending.)

2. Recessions generally affect the populace more than the super rich. Recessions cause unemployment among the lower paid, which leads to reduced pay, which in turn, leads to higher profits for corporations and wealthy shareholders. (Note how the stock markets rose dramatically after the most recent recession, while employment lagged.)

All of this widens the Gap between the rich and the rest, and it is the Gap that makes the rich rich. (Without the Gap, no one would be rich, and the wider the Gap, the richer they are.)

So it is the super rich, who bribe the politicians (via campaign contributions and promises of lucrative employment later) to widen the Gap. The super rich also bribe the media (via ownership) and the economists (via contributions to universities and “think tanks”) to support a balanced budget — all to widen the Gap.

Now, with the Presidential campaign in full swing, we again see the debt snakes slithering in, to steal our livelihood and our children’s futures, while pretending to be oh, so frugal.

Yes, they are frugal, if being frugal means taking from the poor and giving to the rich.

While both political parties are guilty, the Tea/Republicans especially, work against anything that helps the middle and the poor — Social Security, Medicare, Medicaid, food stamps, aids to housing, aids to education. Even the abortion issue has a money twist, for the rich always are able to obtain abortions, while the poor are forced to give birth to unaffordable children.

The next time you read or hear a politician, economist or media writer promote a federal balanced budget know this: Either he/she is ignorant of economics or has been paid by the rich to impoverish you and yours.

The debt snakes are slithering in again. Adam and Eve were punished severely for listening to a snake. Don’t let it happen to you.

Don’t listen to debt snakes.

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================
Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)

10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
——————————————————————————————————————————————

10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
1. A growing economy requires a growing supply of dollars (GDP=Federal Spending + Non-federal Spending + Net Exports)
2. All deficit spending grows the supply of dollars
3. The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
4. The limit to non-federal deficit spending is the ability to borrow.

THE RECESSION CLOCK
Monetary Sovereignty

Monetary Sovereignty

Vertical gray bars mark recessions.

As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.

#MONETARYSOVEREIGNTY

–Has the IMF admitted the obvious? Close, but no cigar. Thursday, Jul 16 2015 

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

Mitchell’s laws:
•Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
•Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money.
•The more federal budgets are cut and taxes increased, the weaker an economy becomes. .
Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
•The single most important problem in economics is
the gap between rich and poor.
•Austerity is the government’s method for widening
the gap between rich and poor.
•Until the 99% understand the need for federal deficits, the upper 1% will rule.
•Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..

===================================================================================================================================================================================================================================================================================

In a speech ten years ago, I said, “Because of the Euro, no euro nation can control its own money supply. The Euro is the worst economic idea since the recession-era, Smoot-Hawley Tariff. The economies of European nations are doomed by the euro.”

Since that date, this blog repeatedly has said, in various ways, “For the euro nations, long term survival requires one of two, and only two, events:”

“1. Adopt some form of a sovereign currency, and become Monetarily Sovereign
or
2. The EU give (not lend) euros to its member nations as needed (i.e. political merger).

And now late, to the party, comes the International Monetary Fund:

The I.M.F. Is Telling Europe the Euro Doesn’t Work

The International Monetary Fund’s memo on Greek debt sustainability, explain(s) why the I.M.F. cannot participate in a new bailout program unless other European countries agree to huge debt relief for Greece, has provided the “Emperor Has No Clothes” moment of the Greek crisis, one that may finally force eurozone members to either move closer to fiscal union or break up.

The I.M.F. memo amounts to an admission that the eurozone cannot work in its current form.

It took them all these years to admit the obvious — that monetarily non-sovereign nations (nations that cannot control their money supply) must have income — money coming from outside their borders — in order to survive long term.

You are monetarily non-sovereign. You must have income in order to pay your bills, long term. You can drain your savings for a while, but eventually your savings will run out.

Businesses are monetarily non-sovereign. Long term, they must have income. They too, can drain their savings, but only for a while.

Cities, counties and states are monetarily non-sovereign. Long term, they must have income, too. Taxes won’t suffice, for taxes are not income. They are a drain on citizens’ savings.

For cities, counties and states, income can take three forms:
1. Net exports of goods and services
2. Tourism
3. Payments from a higher government (Cities receive from counties and states; states receive from a Monetarily Sovereign federal government)

When a nation takes on the euro, it surrends the single most valuable asset any nation can have: Its Monetary Sovereignty.

More valuable than natural resources, population or education, Monetary Sovereignty allows a nation to buy anything and to pay any bill.

One might have hoped that at long last, the IMF finally will have admitted this most basic of all economics facts.

It lays out three options for achieving Greek debt sustainability, all of which are tantamount to a fiscal union . . .

Yes, a fiscal union, like a United States of Europe.

But just as we hoped to believe the IMF has begun to say the obvious, it disappoints us:

. . . an arrangement through which wealthier countries would make payments to support the Greek economy.

Not coincidentally, this is the solution many economists have been telling European officials is the only way to save the euro — and which northern European countries have been resisting because it is so costly.

The three options laid out by the I.M.F. would have different operations, but they share an important feature: They involve other European countries giving Greece money without expecting to get it back.

No, no, no.

Where would the “other European countries” obtain the euros they would be expected to give to Greece and the other impoverished euro nations? Answer: They would have to give less to their own citizens.

To save the euro, a failed concept, the IMF has proposed a sure-to-fail concept: Monetarily non-sovereign nations supporting other monetarily non-sovereign nations, requiring austerity for all.

The rich people who run Europe are not satisfied with enslaving some of Europe’s citizens. They have hatched a plan to enslave all of Europe’s citizens, even those in nations that, to date, have avoided recession and depression.

The troika [European Commission (EC), the European Central Bank (ECB)and the International Monetary Fund (IMF)] together are Monetarily Sovereign. They have the unlimited ability to create euros.

They have the unlimited power to give (not lend) euros to member nations, thus growing the economies of those nations.

Already having impoverished much of the eurozone, the IMF proposes enslaving the entire eurozone.

One of the debt relief options proposed by the I.M.F. is “explicit annual transfers to the Greek budget,” that is, direct payments from other governments to Greece, which it could use to make its debt payments.

A second option is extending the grace period, during which Greece would be relieved of the obligation to make interest or principal payments on its debt to European countries, through the year 2053 — at the expense of Greece’s creditors, most of which now are other European governments.

The third option floated by the I.M.F., (is) a cancellation of a portion of Greece’s debts (to other nations).

The memo makes clear what the real cost to Europe of continued eurozone membership for Greece is: If European governments want to keep Greece in, they’re going to have to put up a lot of money in one non-loan form or another, money they will give Greece that they never get back.

The entire concept is ludicrous. Greece is deeply in debt. Its money supply has been drained.

Greece cannot pay its debt out of income, because it has no net source of income, and being monetarily non-sovereign, it cannot create euros.

The IMF “solution”: Force other monetarily non-sovereign nations to drain their own money supplies.

In short, rather than trying to make all euro nations rich, the IMF proposes to make all euro nations poor.

It is a concept that even the uneducated would realize is stupid . . . except for one thing: The troika is not stupid. They know exactly what they are doing.

The goal is power. By impoverishing more euro nations, the troika (the only entity with the unlimited power to create euros) increases its own relative power.

Why settle for just the Greek people crawling and begging for food, clothing and housing, when one can have all Europeans on their knees, at your mercy?

It is a cruel plan devised by cruel people, who have seized on the opportunity to conquer Europe, not by force of arms, but by force of money — a bloodless coup that will dominate a continent.

Is it any wonder that the thought of Greece, freeing itself from the chains of euro-austerity, had the troika in such a panic.

Unfortunately, the government of Greece seems to have failed its own people, and sold them into slavery.

The Greek people voted to free themselves. They voted against austerity. They tried.

Close. But no cigar.

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================
Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)

10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
——————————————————————————————————————————————

10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
1. A growing economy requires a growing supply of dollars (GDP=Federal Spending + Non-federal Spending + Net Exports)
2. All deficit spending grows the supply of dollars
3. The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
4. The limit to non-federal deficit spending is the ability to borrow.

THE RECESSION CLOCK
Monetary Sovereignty

Monetary Sovereignty

Vertical gray bars mark recessions.

As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.

#MONETARYSOVEREIGNTY

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